Financial Affairs – Turismo STP http://turismo-stp.org/ Fri, 30 Apr 2021 08:29:26 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.1 https://turismo-stp.org/wp-content/uploads/2021/04/default.png Financial Affairs – Turismo STP http://turismo-stp.org/ 32 32 What Is A Payday Loan? https://turismo-stp.org/i-bad-credit-loan/ https://turismo-stp.org/i-bad-credit-loan/#respond Fri, 30 Apr 2021 08:25:58 +0000 https://turismo-stp.org/?p=461 If you’re ever in a pinch and need money immediately but don’t qualify for a personal loan, you might think about taking out a payday loan. A payday loan is a short-term, Oak Park Financial says small loan that you repay once you receive your next paycheck, typically two to four weeks after you take […]]]>

If you’re ever in a pinch and need money immediately but don’t qualify for a personal loan, you might think about taking out a payday loan. A payday loan is a short-term, Oak Park Financial says small loan that you repay once you receive your next paycheck, typically two to four weeks after you take out the loan. Payday loans tend to have small loan limits, usually up to $500, and don’t require a credit check.

While they might be easy for many people to get, they can be costly and harmful to you long after you borrow. Here’s how payday loans work, how they impact your credit and alternative options.

How a Payday Loan Works

You can take out a payday loan online or at an in-person location if it’s available in your state. For many payday loan lenders, there’s no credit check involved. It’s enticing for borrowers who don’t have great credit—or any credit—and need cash fast.

Once you complete an application, you’ll write a postdated check for the amount you borrow, including fees and interest, guaranteeing the lender gets paid by your next payday. If you can’t afford to repay the loan by the due date, some lenders have an option to renew or rollover your plan to extend the due date, but this will result in additional fees and interest.

Payday Loan Dangers

Payday loan lenders prey on the most vulnerable groups: those who are in dire need of funds but don’t have a good credit history to borrow from banks, credit unions and online lenders. Because lenders tout immediate funds into your account and no credit check, many borrowers who don’t need to borrow a lot of money look toward a payday loan.

But predatory lenders are everywhere, so much so that some states don’t permit payday loans. Most states regulate payday loans, including repayment terms, finance charges and the loan amount.

Even with regulations in place, interest rates can approach 400%. Conversely, personal loan interest rates can be as high as 36%, and that’s for borrowers with very low credit scores or limited credit histories.

A big danger with payday loans is the repayment period. Traditional personal loans, even those in small amounts, let you repay your loan over the course of a few months. Payday loans, on the other hand, require you to repay the loan anywhere from 14 to 31 days after you take it out. Many borrowers don’t have the funds to pay back the loan in this time frame and, in some cases, end up borrowing more to repay their loan, along with the extra finance charges.

Who a Payday Loan Is Right For

Payday loans are costly and can cause more harm than good. While it’s one way to get money in your hands until your next paycheck, the risks typically outweigh the benefits. We don’t recommend using payday loans. Instead, look toward alternative options, including personal loans, credit cards or even borrowing money from friends or family.

Payday Loan Costs

How much your loan costs depends on how much you’re borrowing, your interest rate, your lender and where you live. Here’s an example of the costs you may experience when you take out a payday loan.

In Iowa, you can borrow up to $500 through a payday loan, and you’ll get charged up to $15 for every $100 you borrow. If you borrow the full $500, that’s an extra $75, or $575 in total. But your annual percentage rate (APR), which is calculated daily, will be much more than that. For example, in Iowa, you can borrow a loan for up to 31 days. If you borrow for the full term, your true APR will be 176%.

To compare, personal loans usually cap their APRs at 36%. If you use a credit card to make a purchase, you’re likely to have an APR that’s less than 30%.

Payday Loan Borrowing Limits

Borrowing limits usually depend on where you live. Since some states don’t allow payday loans, you might not have the option to borrow money through one.

Most states cap their borrow limits at around $500, but limits vary. For example, Delaware caps its borrow amount at $1,000 while California sets a maximum limit of $300.

Repaying a Payday Loan

For many lenders, you set up a single loan repayment when you borrow the money. You’ll typically repay your loan through a postdated check, including the full amount you borrowed plus any fees and interest. However, you may also be able to pay online or through a direct debit from your bank account.

Your payment date will be between 14 and 31 days from when you borrow the loan, usually by your next payday. The loan is repaid in one payment, compared to personal loans, which have installment payments for a set number of months. Personal loan lenders look at your income to make sure you can afford what you borrow, making sure monthly payments fit into your budget.

How Payday Loans Can Affect Your Credit

Many payday loan lenders don’t run credit checks, so applying for a payday loan doesn’t impact your credit score or report. Even if you borrow the money and repay it all on time and in full, the positive payment doesn’t impact your credit, either.

But if you don’t pay your loan back in full and your payday loan lender hasn’t electronically withdrawn money from your account, you could be on the hook for the unpaid balance plus any outstanding finance charges. If you’re long overdue in payments, the lender could get a collection agency involved and the delinquent mark can go on your credit report.

Payday Loan Alternatives

Payday loans aren’t a good option in almost every circumstance. If you can, explore all your other options before taking out a payday loan, including:

  • Personal loans. While many personal loan lenders only approve borrowers with at least fair or good credit, there are some lenders that tailor to borrowers with poor or subprime credit scores. Some credit unions have payday loan alternatives, letting borrowers take out loans up to $1,000, depending on the institution. Credit unions are not-for-profit and are more likely to work with borrowers who don’t have great credit.
  • Credit cards. If you already have a credit card, consider using it to make a payment or purchase. APRs are lower compared to payday loans and since you already have one, you don’t have to qualify for one. Most cards also offer a cash advance—which allows you to withdraw cash from an ATM—but these transactions come with high APRs and additional fees. However, both options are cheaper than payday loans.
  • Borrow money. If you don’t need to borrow much, ask friends or relatives to cover you until you can streamline expenses. Many times, borrowing money from loved ones means you have a little bit of flexibility when it comes to repaying your loan, and often without interest. If you choose this route, agree on terms and conditions that outline how to repay your loan and what happens if you can’t repay it.

In addition to these alternatives, review your financial situation carefully, including your required payments and monthly expenses, to see if you can free up some funds. For example, go over your budget and see if some not-so-dire expenses can wait. You might find you have enough spare cash to cover your needs until your next payday, allowing you to avoid the possible pitfalls that come with a payday loan.

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Torchlight Loans Metamaterial US$10,000,000, Allowing Metamaterial to Execute on Business Plan in Advance of Shareholder Votes https://turismo-stp.org/torchlight-loans-metamaterial-us10000000-allowing-metamaterial-to-execute-on-business-plan-in-advance-of-shareholder-votes/ https://turismo-stp.org/torchlight-loans-metamaterial-us10000000-allowing-metamaterial-to-execute-on-business-plan-in-advance-of-shareholder-votes/#respond Fri, 30 Apr 2021 08:19:59 +0000 https://turismo-stp.org/?p=446 PLANO, TX and HALIFAX, NS / ACCESSWIRE / February 22, 2021 / Torchlight Energy Resources, Inc. (NASDAQ:TRCH), an oil and gas exploration company (“Torchlight”) and Metamaterial Inc. (“META”) (CSE:MMAT), a developer of high-performance functional materials and nanocomposites, announced today that, in accordance with the terms of the previously announced Arrangement Agreement (the “Arrangement Arrangement”) between […]]]>

PLANO, TX and HALIFAX, NS / ACCESSWIRE / February 22, 2021 / Torchlight Energy Resources, Inc. (NASDAQ:TRCH), an oil and gas exploration company (“Torchlight”) and Metamaterial Inc. (“META”) (CSE:MMAT), a developer of high-performance functional materials and nanocomposites, announced today that, in accordance with the terms of the previously announced Arrangement Agreement (the “Arrangement Arrangement”) between Torchlight and META, pursuant to which Torchlight and META will complete a business combination (the “Arrangement”), Torchlight has loaned US$10,000,000 to META evidenced by an unsecured convertible promissory note (the “Promissory Note”). The Promissory Note bears interest at 8% per annum, with all unpaid principal and interest due in one lump sum payment on February 18, 2022 (the “Maturity Date”). If the Arrangement Agreement is terminated or expires without the completion of the Arrangement, Torchlight will have the right to convert all or any portion of the principal amount and any accrued but unpaid interest under the Promissory Note into the common shares of META (the “Common Shares”) at a conversion price of C$2.80 per Common Share (subject to adjustment as described in the Promissory Note). Further, if the Arrangement is not completed, META will be obligated to repay to Torchlight the total unpaid balance of the principal and interest under the Promissory Note, to the extent not converted into Common Shares, on the Maturity Date.

META intends to use approximately US$5,000,000 of the proceeds from the loan made pursuant to the Promissory Note to accelerate its acquisition of certain pilot scale production equipment to expand its roll-to-roll product family production capabilities, support META’s on-going development of optical products for targeted use in life sciences applications, and expand its metaOptix™ product line for its e-commerce business. The remainder will be used for general corporate purposes including working capital and merger related costs.

About Metamaterial Inc.

META is changing the way we use, interact with, and benefit from light and other forms of energy. META designs and manufactures advanced materials and performance functional films which are engineered at the nanoscale to control light and other forms of energy. META is an award winning Global Cleantech 100 company with products that support sustainability by doing more with less; they encompass lightweight, sustainable raw materials and processes which consume less energy and offer more performance. META has a growing patent portfolio and is currently developing new materials with diverse applications in concert with companies in the automotive, aerospace, energy, consumer electronics and medical industries. META is headquartered in Halifax, Nova Scotia and has R&D and Sales offices in London, UK and Silicon Valley. For additional information on META, please visit www.metamaterial.com

Forward Looking Information

This release includes forward-looking information within the meaning of Canadian securities laws regarding META and its business, which may include, but are not limited to, statements with respect to the terms and anticipated timing of the Arrangement pursuant to the Arrangement Agreement, the mailing date of the meeting materials, the date of the Meeting, the intention to raise equity capital, the potential continued listing on the NASDAQ and the benefits thereof, the disposition of Torchlight’s oil and gas assets, the approval of the Transaction by the shareholders of META, the business strategies, product development and operational activities of META and Torchlight. Often but not always, forward-looking information can be identified by the use of words such as “expect”, “intends”, “anticipated”, “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would” or “will” be taken, occur or be achieved. Such statements are based on the current expectations and views of future events of the management of META and are based on assumptions and subject to risks and uncertainties. Although the management of META believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the companies, including risks regarding the ability of the parties to close the Arrangement pursuant to the Arrangement Agreement, the ability of the parties to raise necessary equity capital, approval of the transaction and continued listing by the NASDAQ, approval of the Canadian Securities Exchange, receipt of shareholder approval and required third party and regulatory consents, the risk that Torchlight may not be able to dispose of its oil and gas assets on favorable terms or at all, risks related to the technology industry, market strategic and operational activities, and management’s ability to manage and to operate the business. Although META has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on any forward-looking statements or information. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and META does not undertake any obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events, or otherwise.

META Meeting and Meeting Materials

META will be holding an annual general and special meeting (the “Meeting”) of shareholders and holders of options, warrants and deferred share units (collectively, the “META Securityholders”) which will be conducted via live audio webcast at https://web.lumiagm.com/191086970 on March 12, 2021 commencing at 11:00 a.m. (Toronto time). At the Meeting, the META Securityholders will be asked to, among other things, pass a special resolution relating to the proposed plan of arrangement (the “Arrangement”) involving META and Torchlight. As announced on December 14, 2020, the Arrangement will be carried out pursuant to the definitive agreement dated December 14, 2020, as amended, which was entered into in connection with the Transaction. On February 18, 2021, the meeting materials for the Meeting, including a notice of annual general and special meeting of META Securityholders and circular, were mailed to META Securityholders of record as at February 5, 2021 in advance of the Meeting in accordance with statutory requirements and the interim order. The materials for the Meeting have been filed by the Company and are available under the Company’s SEDAR profile at www.sedar.com as well as on the Company’s website.

The Canadian Securities Exchange has neither approved nor disapproved the contents of this news release.

About Torchlight Energy Resources, Inc.

Torchlight Energy Resources, Inc. (TRCH), based in Plano, Texas, is a high growth oil and gas Exploration and Production (E&P) company with a primary objective of acquisition and development of domestic oil fields. Torchlight has assets focused in West and Central Texas where their targets are established plays such as the Permian Basin. For additional information on Torchlight, please visit www.torchlightenergy.com.

Forward-Looking Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the “safe harbor” created by those sections. All statements in this release that are not based on historical fact are “forward looking statements.” These statements may be identified by words such as “estimates,” “anticipates,” “projects,” “plans,” “strategy,” “goal,” or “planned,” “seeks,” “may,” “might”, “will,” “expects,” “intends,” “believes,” “should,” and similar expressions, or the negative versions thereof, and which also may be identified by their context. All statements that address operating performance or events or developments Torchlight expects or anticipates will occur in the future, such as stated objectives or goals, our refinement of strategy, our attempts to secure additional financing, our exploring possible business alternatives, or that are not otherwise historical facts, are forward-looking statements. While management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements as a result of various factors, including risks associated with Torchlight’s ability to obtain additional capital in the future to fund planned expansion, the demand for oil and natural gas which demand could be materially affected by the economic impacts of COVID-19 and possible increases in supply from Russia and OPEC, the proposed business combination transaction with Metamaterial, Inc. pursuant to the Arrangement Agreement, general economic factors, competition in the industry and other factors that could cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Additional risks and uncertainties are described in or implied by the Risk Factors and in Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of our 2019 Annual Report on Form 10-K, filed on March 16, 2020 and our other reports filed from time to time with the Securities and Exchange Commission. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based.

Additional Information and Where to Find It

Torchlight will prepare a definitive proxy statement for Torchlight’s stockholders to be filed with the SEC regarding the Arrangement. The proxy statement will be mailed to Torchlight’s stockholders. Torchlight urges investors, stockholders and other interested persons to read, when available, the proxy statement, as well as other documents filed with the SEC, because these documents will contain important information about the Arrangement. Such persons can also read Torchlight’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, for a description of the security holdings of its officers and directors and their respective interests as security holders in the consummation of the transactions contemplated in connection with the Arrangement. Torchlight’s definitive proxy statement will be mailed to stockholders of Torchlight as of a record date to be established for voting on the Arrangement. Torchlight’s stockholders will also be able to obtain a copy of such documents, without charge, by directing a request to: John A. Brda, President of Torchlight Energy Resources, Inc., 5700 W. Plano Parkway, Suite 3600, Plano, Texas 75093; e-mail: john@torchlightenergy.com These documents, once available, can also be obtained, without charge, at the SEC’s web site (http://www.sec.gov).

Participants in Solicitation

Torchlight and its directors, executive officers and other members of their management and employees, under SEC rules, may be deemed to be participants in the solicitation of proxies of Torchlight stockholders in connection with the Arrangement. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of Torchlight’s directors in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which was filed with the SEC on March 16, 2020. Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of proxies to Torchlight’s stockholders in connection with the Arrangement will be set forth in the proxy statement for the Arrangement when available. Information concerning the interests of Torchlight’s participants in the solicitation, which may, in some cases, be different than those of Torchlight’s equity holders generally, will be set forth in the proxy statement relating to the Arrangement when it becomes available.

Contacts

Torchlight:
Derek Gradwell
Integrous Communications
Phone: 512-270-6990
dgradwell@integcom.us
ir@torchlightenergy.com

Meta:
Mark Komonoski
Director Capital Markets and IR
Metamaterial Inc.
phone: 1-877-255-8483
mark@metamaterial.com

SOURCE: Torchlight Energy Resources, Inc.

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Consumer Finance Regulatory News and Trends https://turismo-stp.org/consumer-finance-regulatory-news-and-trends/ https://turismo-stp.org/consumer-finance-regulatory-news-and-trends/#respond Fri, 30 Apr 2021 08:08:41 +0000 https://turismo-stp.org/?p=407 This regular publication by DLA Piper lawyers focuses on helping clients navigate the ever-changing consumer finance regulatory landscape. Regulatory developments Federal CFPB issues warning to mortgage servicers. The Consumer Financial Protection Bureau (CFPB) issued an announcement warning mortgage servicers to take “all necessary steps now to prevent a wave of avoidable foreclosures” when pandemic-related protections […]]]>

This regular publication by DLA Piper lawyers focuses on helping clients navigate the ever-changing consumer finance regulatory landscape.

Regulatory developments

Federal

  • CFPB issues warning to mortgage servicers. The Consumer Financial Protection Bureau (CFPB) issued an announcement warning mortgage servicers to take “all necessary steps now to prevent a wave of avoidable foreclosures” when pandemic-related protections expire. The CFPB stated that it will “closely monitor how servicers engage with borrowers, respond to borrower requests, and process applications for loss mitigation” and advised servicers to “plan now” for the expected need to increase capacity to “reach out and respond to the large number of homeowners likely to need loss mitigation assistance.” This is consistent with the CFPB’s recent announcement that one of its priorities will be preventing lasting harm to consumers related to COVID-19 financial hardships.
  • CFPB rescinds policy statement on abusive acts and practices. The CFPB issued an announcement that it has rescinded its January 24, 2020 “Statement of Policy Regarding Prohibition on Abusive Acts or Practices,” under which the CFPB stated it would decline to seek civil money penalties and disgorgement for certain abusive acts or practices. The CFPB has instead pledged going forward to exercise the full scope of its supervisory and enforcement authority under the Dodd-Frank Act in order to better protect consumers from abusive acts or practices in the marketplace. This likely foreshadows an expansion of regulatory authority in this area.
  • CFPB issues interpretive rules on sexual orientation and gender identity discrimination under the ECOA. The CFPB issued an interpretive rule clarifying that sex discrimination under the Equal Credit Opportunity Act (ECOA) and Regulation B includes discrimination on the basis of sexual orientation and gender identity, including discrimination based on perceived nonconformity with traditional sex- or gender-based stereotypes and applicants’ social or other associations. The CFPB also stated that it will be reviewing its publication and examination guidance documents to reflect this interpretive rule. This is consistent with another of the Bureau’s recent announcement that it will seek to broadly address inequalities in consumer financial services.
  • CFPB and FTC issue joint statement on preventing illegal evictions. The CFPB and FTC issued a joint statement on the agencies’ collective efforts to prevent unlawful evictions. The statement pledged that both agencies will be monitoring and investigating eviction practices to ensure compliance with CDC, state and local laws and moratoria on evictions. The statement also asserted that failure to comply with applicable moratoria may constitute “deceptive or unfair practices” in violation of both the FTCA and the FDCPA.
  • CFPB issues statement encouraging financial institutions and debt collectors to allow stimulus payments to reach consumers. The CFPB issued a statement expressing concern that consumers’ COVID-19 relief stimulus payments will be “intercepted by financial institutions or debt collectors to cover overdraft fees, past-due debts, or other liabilities,” rather than reaching consumers in full. The CFPB is encouraging institutions to be flexible in working with consumers to alleviate “the extraordinary financial challenges facing so many families across the country.” The CFPB’s letter is merely advisory; however, some states have passed legal and regulatory measures that prohibit institutions from applying consumers’ COVID-19 payments towards past-due balances and overdraft charges. The CFPB has stated that it will continue to closely monitor consumer complaints to ensure that institutions are not collecting such consumer relief funds in violation of applicable consumer protection laws.
  • CFPB rescinds seven policy statements on regulatory flexibility related to COVID-19. The CFPB issued an announcement that it would be rescinding seven policy statements that were issued between March 26 and June 3, 2020 in response to COVID-19. According to the CFPB, the recissions “reflect the Bureau’s commitment to consumer protection, and the fact that financial institutions have had a year to adapt their operations to the difficulties posed by the pandemic.” The CFPB also rescinded a 2018 bulletin on supervisory communications and replaced it with a revised bulletin – CFPB Bulletin 2021-01 – describing its use of matters requiring attention. The rescinded policy statements and bulletin are:
    • Statement on Bureau Supervisory and Enforcement Response to COVID-19 Pandemic (March 26, 2020)
    • Statement on Supervisory and Enforcement Practices Regarding Quarterly Reporting Under the Home Mortgage Disclosure Act (March 26, 2020)
    • Statement on Supervisory and Enforcement Practices Regarding CFPB Information Collections for Credit Card and Prepaid Account Issuers (March 26, 2020)
    • Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act (April 1, 2020)
    • Statement on Supervisory and Enforcement Practices Regarding Certain Filing Requirements Under the Interstate Land Sales Full Disclosure Act (ILSA) and Regulation J (April 27, 2020)
    • Statement on Supervisory and Enforcement Practices Regarding Regulation Z Billing Error Resolution Timeframes in Light of the COVID-19 Pandemic (May 13, 2020)
    • Statement on Supervisory and Enforcement Practices Regarding Electronic Credit Card Disclosures in Light of the COVID-19 Pandemic (June 3, 2020)
    • Bulletin 2018-01: Changes to Types of Supervisory Communications
  • CFPB provides consumer response annual report to Congress. The CFPB provided to Congress its annual complaint report. The CFPB noted that the effects of the COVID-19 pandemic are reflected in the report, as the CFPB handled approximately 542,300 complaints last year, which was nearly a 54-percent increase from the 352,400 complaints from 2019. Per the report, credit and consumer reporting complaints accounted for more than 58 percent of complaints received, followed by debt collection (15 percent), credit card (7 percent), checking or savings (6 percent) and mortgage complaints (5 percent). Many of these complaints are connected to COVID-19-related financial distress.
  • 2020 HMDA data on mortgage lending now available. The 2020 data from The Home Mortgage Disclosure Act (HMDA) Modified Loan Application Register (LAR) is now available here from the Federal Financial Institutions Examination Council’s HMDA Platform. The LAR contains loan-level information from financial institutions for approximately 4,400 HMDA filers.
  • CFPB proposes delay of mandatory compliance date for General Qualified Mortgage final rule. The CFPB issued a notice of proposed rulemaking to delay the date for mandatory compliance with the General Qualified Mortgage (QM) final rule from July 1, 2021 to October 1, 2022. According to the CFPB, extending the mandatory compliance date will give lenders more time to offer QM loans based on homeowners’ debt-to-income ratio, rather than based on a pricing cut-off. This will allow lenders more time to utilize the GSE Patch, which provides QM status to loans that are eligible for sale to Fannie Mae or Freddie Mac. The CFPB believes this extension will give consumers struggling with the impact of the COVID-19 pandemic better access to affordable, responsible mortgage credit and better allow them to retain housing.
  • CFPB issues statement regarding protecting consumers in the small-dollar lending market. The CFPB published a post stating that the CFPB is acutely aware of the consumer harms in the small-dollar lending market. Specifically, the CFPB noted that the prior administration issued a rule that revoke parts of the CFPB’s 2017 small-dollar lending rule, including requirements for assessing a borrower’s ability to repay. Although the small-dollar lending rule is still being challenged in court – and thus is currently not in effect – the CFPB stated that it believes the harms identified in the 2017 still exist and that it will address those harms through vigorous market monitoring, supervision, enforcement and, if appropriate, rulemaking.
  • FTC announces new rulemaking group. The FTC announced the creation of a new rulemaking group formed with the intention of “reinvigorating” the commission’s rulemaking authority. This decision was made in light of the pending Supreme Court case, AMG Capital Management, LLC v. Federal Trade Commission, which has the potential to significantly curtail the FTC’s authority to seek monetary relief from violators via enforcement actions under section 13(b) of the FTCA. Given this possibility, FTC states the new rulemaking group will help refocus efforts towards developing “effective deterrence” against market harms, with an emphasis on new rulemakings to prohibit unfair or deceptive practices and unfair methods of competition.
  • Federal financial regulatory agencies announce joint request for views on the use of artificial intelligence by financial institutions. The Federal Reserve Board, CFPB, Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA) and Office of the Comptroller of the Currency (OCC) announced a request for input on the growing use of AI by financial institutions. The agencies have specifically requested comments on issues such as (i) the use of machine learning; (ii) governance, risk management and controls; (iii) the challenges that financial institutes face in developing, adopting and managing AI; and (iv) whether any regulatory clarifications would be particularly helpful.

State

  • New York DFS issues letter to US Secretary of Education on behalf of multi-state coalition of regulators regarding protections for student loan borrowers. The New York Department of Financial Services (DFS) sent a letter to the new Department of Education Secretary on behalf of itself and regulators from California, Colorado, Connecticut, Illinois, Maine, Massachusetts, New Jersey, Rhode Island, Washington and Wisconsin. The letter urges Secretary Cardona to reverse two policies instituted by former Secretary Betsy DeVos that inhibited states’ ability to regulate the student loan servicing industry. The first policy was guidance form the Department stating that federal law preempts state law with respect to regulation of private companies that service federal student loans. The second policy was the Department’s use the Privacy Act of 1974 to bar states from getting information on loans and loan servicers, preventing them from effectively regulating the same.
  • Illinois enacts Predatory Loan Prevention Act. Illinois Governor JB Pritzker signed into law SB 1792, which includes the Predatory Loan Prevention Act, which takes effect immediately. The new law makes all loans made under the Consumer Installment Loan Act, Motor Vehicle Retail Installment Sales Act, the Retail Installment Sales Act, the Sales Finance Agency Act and the Payday Loan Reform Act, made by non-exempt entities are subject to an interest rate limit of 36 percent that is calculated in accordance with the Military Annual Percentage Rate under the federal Military Lending Act, and accompanying regulations. While banks and credit unions are generally exempt, it eliminates any exemption under the act for (1) the person or entity holds, acquires or maintains, directly or indirectly, the predominant economic interest in the loan; or (2) the person or entity markets, brokers, arranges or facilitates the loan and holds the right, requirement or first right of refusal to purchase loans, receivables or interests in the loans; or (3) the totality of the circumstances indicate that the person or entity is the lender and the transaction is structured to evade the requirements of this Act. Circumstances that weigh in favor of a person or entity being a lender include, without limitation, where the person or entity (i) indemnifies, insures or protects an exempt person or entity for any costs or risks related to the loan; (ii) predominantly designs, controls or operates the loan program; or (iii) purports to act as an agent or service provider or in another capacity for an exempt entity while acting directly as a lender in other states.

Enforcement actions

Federal

  • Federal court dismisses CFPB enforcement action against student loan debt collectors. The US District Court for the District of Delaware has dismissedSeila Law LLC v. CFPB, which held that the restriction on the president’s authority to remove its director violated separation of powers. Based on Selia, the district court reasoned that the CFPB lacked authority to institute the enforcement action and Director Kathy Kraninger’s post-Selia ratification of the enforcement action was ineffective because it occurred after the statute of limitations for filing the enforcement action had expired. The district court also rejected the CFPB’s argument that the statute of limitations should be tolled with respect to ratification because the enforcement action was timely filed in the first instance. The district court reasoned that, because the CFPB knew its authority was being legally questioned, it should have taken additional acts to preserve its rights pending the resolution of the Selia case, such as by seeking a tolling agreement. Our previous coverage of the Selia decision is available here.
  • CFPB files suit against student loan debt relief company for unlawful marketing and sales practices. The CFPB filed a complaint in the United States District Court for the Central District of California against a California-based debt relief company, its owner and chief executive for violations of the Telemarketing Sales Rule (TSR) by charging illegal advance fees. The CFPB alleges that the defendant charged consumers upfront fees to file paperwork to access debt-relief programs that are otherwise free to the public. The CFPB also brought claims against the defendant’s owner and chief executive for their roles in facilitating the TSR violations, including by editing the scripts used by sales staff and supervising customer payments and merchant accounts. The complaint seeks injunctive and monetary relief, as well as civil penalties.
  • CFPB files suit against payment processor and its former CEO for facilitating consumer fraud scheme. The CFPB filed a complaint in the US District Court for the Northern District of Illinois against an Illinois-based check payment processing company and its founder and former CEO for UDAP and TSR violations concerning their role in an internet-based technical support scam. The CFPB alleged that the defendants violated the TSR by processing more than $71 million in payments for companies that sold fraudulent software and IT services, often to senior citizens, while ignoring clear red flags of illegal conduct such as warnings from financial institutions, inquiries from law enforcement agencies, exceptionally high return rates and voluminous customer complaints. The CFPB also alleged that, by processing payments related to the fraud scheme, the defendants engaged in unfair practices because consumers could not reasonably avoid the harm of being misled about the fraudulent software and services.
  • FTC announces $16 million settlement with two debt collection agencies over attempts to collect “phantom” debts. The FTC announced a consent order with two South Carolina-based companies over alleged UDAP violations in connection with a phantom debt collection scheme. The FTC alleged that the defendants (i) used illegal robocalls to threaten consumers with lawsuits over debts that never existed in the first place or had previously been paid off, (ii) misrepresented themselves as mediators or attorneys to consumers and (iii) threatened consumers with legal action ranging from lawsuits to arrest. The consent order also requires the companies to (i) turn over the contents of certain bank accounts and (ii) implement enhanced recordkeeping, compliance monitoring and compliance reporting policies.
  • FTC announces $2.6 million settlement with operator of mobile banking app over deceptive marketing practices. The FTC has announced a consent order with a California-based company and its CEO over alleged UDAP violations concerning the marketing of a mobile banking application. The FTC alleged that the company engaged in deceptive practices by (i) promising users of the free mobile banking app that they could make transfers out of their accounts and would receive their requested funds within three to five business days, but some users waited weeks or even months to receive their money, or never received their money at all; (ii) misrepresenting the interest rates that consumers would receive; and (iii) ceasing to pay interest on deposits after a customer requested a withdrawal, but prior to actually transferring the funds out of the consumer’s account. The settlement agreement requires the defendants to (i) repay at least $2.6 million in customer funds, (ii) cease using any customer information obtained prior to the settlement for any marketing purposes and (iii) implement enhanced recordkeeping, compliance monitoring and compliance reporting policies.

State

  • Texas attorney general sues retail power provider over UDAP violations in connection with Winter Storm Uri. The State of Texas filed a complaint against a retail power provider over deceptive marketing and payment processing practices under the Texas Deceptive Trade Practices Act. The complaint alleges that the company misrepresented the risk associated with purchasing variable-rate power and – particularly relevant to the financial services context – the company’s use of an automatic system for debiting customer’s checking accounts. During Winter Storm Uri, the market price of electricity was set by the state regulator at approximately $9,000 per megawatt hour, which the defendant then passed on to consumers through automatic withdrawals from customer bank accounts. The complaint alleges that the company’s automatic withdrawal system harmed consumers by causing unavoidable overdrawn accounts, overdraft fees and other financial difficulties, and that the company’s billing practices prevented consumers from taking other measures to prevent incurring additional charges. Additional law enforcement actions relating to Winter Storm Uri may be on the horizon.
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CMS begins recovering Medicare advance and accelerated payments https://turismo-stp.org/cms-begins-recovering-medicare-advance-and-accelerated-payments/ https://turismo-stp.org/cms-begins-recovering-medicare-advance-and-accelerated-payments/#respond Wed, 07 Apr 2021 23:13:56 +0000 https://turismo-stp.org/cms-begins-recovering-medicare-advance-and-accelerated-payments/ By Jacqueline LaPointe April 5, 2021 – CMS has started recovering Medicare payments it made to healthcare providers last year during the COVID-19 pandemic. In a recent MLN Questions newsletter, the agency said it began collecting payments through COVID-19 Expedited and Advance Payments (CAAP) on March 30, 2021 and would continue to recover based on […]]]>

By Jacqueline LaPointe

– CMS has started recovering Medicare payments it made to healthcare providers last year during the COVID-19 pandemic.

In a recent MLN Questions newsletter, the agency said it began collecting payments through COVID-19 Expedited and Advance Payments (CAAP) on March 30, 2021 and would continue to recover based on the first anniversary of receiving their first payment by suppliers.

“Please make sure your billing staff are aware that recovery has started, or will begin soon, but no earlier than one year from the date we issued the CAAP to you,” CMS said in the newsletter.

Lawmakers expanded Medicare’s accelerated and advance payments program through the Aid, Relief and Economic Security (CARES) law against the coronavirus last March. The program distributed a total of $ 100 billion to hospitals and other types of providers affected by the COVID-19 pandemic by May 2020.

CMS has the authority to provide up-front Medicare payments to providers in the event of a national emergency or natural disaster “to speed up cash flow to affected health care providers and providers.” Payments are intended to support providers when submitting the complaint or discontinuing processing.

READ MORE: CMS amends repayment terms for accelerated prepayments

However, providers who accept payments must reimburse the CMS, and the agency may withhold future Medicare reimbursements from the provider until the initial payments are recovered.

These providers were initially scheduled to begin reimbursing Medicare payments made in advance during the COVID-19 pandemic in August 2020.

But CMS and lawmakers, through the 2021 Standing Appropriations Act and the Other Extensions Act (PL 116-159), have extended the original repayment deadlines in light of ongoing struggles arising of the pandemic.

During the payback period, CMS will withhold a portion of new Medicare claims from providers – 25% during the first 11 months of payback and 50% during the six months – until payments advanced last year are clawed back.

Suppliers are required to have repaid advance payments in full 20 months after receiving the first payment. If they don’t, CMS will charge four percent interest on the remaining balance.

READ MORE: FAH wants more time and lower rates on Medicare advance payments

Clawback conditions are more favorable for suppliers thanks to the 2021 Standing Appropriations Act and the Other Extensions Act and other laws. Usually, providers have a shorter time frame until the repayment is made and CMS would withhold future full Medicare repayments until the loan is repaid.

The interest rate is also generally around 10 percent for any balances remaining after the payback period.

But healthcare providers are still concerned about reimbursing CMS for up-front Medicare reimbursements as their organizations continue to face significant challenges with COVID-19.

According to the last hospital financial performance report from Kaufman Hall, hospitals and healthcare systems are still seeing small margins as inpatient and outpatient volumes remain down from before the pandemic.

Specifically, the median hospital operating margin index was -0.5% in February, not counting federal aid intended to offset lost revenue and expenses related to COVID-19. The margin had fallen 30.8% year over year.

READ MORE: CMS pays $ 34 billion in Medicare prepayment to providers

As healthcare providers continue to face depressed margins and volumes, many industry groups are renewing their calls for total loan cancellations.

“As vendors strive to continue breaking out of ties created by responding to COVID-19, we call on Congress to avoid adding to existing financial pressures and consider allowing cancellation of loans made. through accelerated and prepayment programs ”, Donald H.. Crane, president and CEO of the American Physician Groups (APG), wrote in a March 25 letter to the leaders of the Senate.

“This would play a critical role in providing physicians with financial assistance in the midst of the current pandemic, given the scale of the changes that have been made to infrastructure and the disruption of service that has occurred during this pandemic. Crane added.

The American Hospital Association (AHA) also recently mentionned that he plans to work with Congress and the Biden administration to get more “relief for hospitals and health systems through fast-track Medicare payments.”

The Kaiser Family Foundation (KFF) has advised that while policymakers are considering further adjustments to loan repayment terms, they are considering the different sources of funding that have already been distributed during the pandemic and the fact that some providers have recovered faster than others.

In addition, they should consider how the changes to reimbursement could increase the tax burden on the Medicare hospital insurance trust fund, which is now slated for. exhaust sooner than the 2026 estimate.

KFF researchers also found that the vast majority ($ 92 billion) of expedited and advance payments during the COVID-19 pandemic went to Part A providers, who were filing claims for hospital stays, stays in skilled nursing homes, some home health visits and palliative care. .

Of these providers, short-stay hospitals received 78% of the payments.

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Alaska delegation helps advance funding for small business assistance | Local News https://turismo-stp.org/alaska-delegation-helps-advance-funding-for-small-business-assistance-local-news/ https://turismo-stp.org/alaska-delegation-helps-advance-funding-for-small-business-assistance-local-news/#respond Wed, 07 Apr 2021 23:13:56 +0000 https://turismo-stp.org/alaska-delegation-helps-advance-funding-for-small-business-assistance-local-news/ A bill co-sponsored by U.S. senators from Alaska that extends emergency small business loan relief through May 31 was enacted by President Biden. The law is effectively pushing back the deadline to apply for the Paycheck Protection Program (P3), which has helped more than 12,000 Alaskan businesses since 2020. The program, which is now in […]]]>

A bill co-sponsored by U.S. senators from Alaska that extends emergency small business loan relief through May 31 was enacted by President Biden.

The law is effectively pushing back the deadline to apply for the Paycheck Protection Program (P3), which has helped more than 12,000 Alaskan businesses since 2020.

The program, which is now in its second round, was scheduled to expire on March 31. The PPP was set up as financial assistance for small businesses in difficulty because of the COVID-19 pandemic.

Alaska businesses that have received the loans include airlines, car dealerships, grocery stores, gyms, hospitals, and doctor’s offices. The average loan amount for American small businesses is $ 59,000.

As of March 28, 2021, the program has generated 8,465 loans totaling $ 631 million to businesses in Alaska, according to the US Small Business Administration in Alaska. In 2020, Alaskan small businesses qualified for 12,087 loans totaling $ 1.3 billion, the Alaska SBA reported.

“I talk to a lot of small businesses,” said Clark Bihag, senior regional manager for the SBA’s Alaska district office. “They tell me that without [PPP] they couldn’t have kept their doors open.

PPP loans can be converted into grants – with debt forgiveness – if the borrower complies with restrictions on the use of money for basic expenses which include paying the payroll, paying rent or rent. mortgage and utility coverage.

Borrowers must devote at least 60 percent of the loan to payroll to qualify for loan forgiveness. They can request a loan forgiveness, after the money is spent, up to the loan amount. The borrower can request the forgiveness of his loan at any time before the maturity date of the loan.

In Congress, more than a dozen senators have co-sponsored legislation to expand the loan program – called the “P3 Extension Act of 2021” – including Republican Senators Dan Sullivan and Lisa Murkowski of Alaska.

The extension was passed overwhelmingly in the US House, in a show of bipartisan support. Alaska Representative Don Young, who was not present for the vote, described the P3 as essential for small businesses and offered advice on its website to homeowners seeking help.

“Congressman Young has been a strong supporter of the Paycheck Protection Program since its inception under the CARES Act,” said Zack Brown, Young’s press secretary. “Small businesses in Alaska have been hit hard by this pandemic, and the congressman believes the P3 program should continue to be funded and made available to our entrepreneurs and their staff.”

PPPs began at the very start of the pandemic to help businesses cope with declining consumer spending as businesses slowed down and people avoided crowds and gatherings.

In 2021, more than 3.5 million PPP loans were issued across the country, for a total of $ 212 billion.

The extension Biden signed on Tuesday not only gives small businesses more time to request relief, but it also gives the SBA an additional month to process requests – until June 30.

More than 100 organizations have supported the extension of the PPP. These include the United States Chamber of Commerce, the American Farm Bureau, and the American Hotel and Lodging Association.

The program’s formula for calculating the loan amount has changed to help more sole proprietors and the self-employed get the help they need.

The Small Business Administration – with offices in Fairbanks and Anchorage – works with community development finance institutions, called CDFIs, to provide assistance to small businesses applying for P3s.

Most of the banks in Alaska are involved in providing PPP assistance. “As you can see from the numbers, there are a lot of companies taking advantage of the program,” Bihag said.

Contact political reporter Linda F. Hersey at 459-7575 or follow her at twitter.com/FDNMpolitics.

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Tennessee lawmakers drag their feet on updating sports betting laws https://turismo-stp.org/tennessee-lawmakers-drag-their-feet-on-updating-sports-betting-laws/ https://turismo-stp.org/tennessee-lawmakers-drag-their-feet-on-updating-sports-betting-laws/#respond Wed, 07 Apr 2021 23:13:56 +0000 https://turismo-stp.org/tennessee-lawmakers-drag-their-feet-on-updating-sports-betting-laws/ Changes in the way sports betting will be regulated Tennessee, but maybe not as quickly as some people would like. A pair of bills that prevent consumers take out high-interest, high-risk loans and open sports betting accounts at the same place were on the agenda of Senate and House committees on Tuesday, but no action […]]]>

Changes in the way sports betting will be regulated Tennessee, but maybe not as quickly as some people would like.

A pair of bills that prevent consumers take out high-interest, high-risk loans and open sports betting accounts at the same place were on the agenda of Senate and House committees on Tuesday, but no action has yet been taken. A second set of bills has been approved and is moving forward in the House.

HB 1267 would essentially deprive the Tennessee Education Lottery Board of Directors of any power over the regulation and enforcement of sports betting. It would entrust these responsibilities to the Sports Betting Advisory Council, composed of nine members.

“This allows the Sports Betting Advisory Council to be autonomous and to act within its jurisdiction outside of the current TELC,” Bill sponsor John Gillespie said in brief remarks.

The House Departments and Agencies subcommittee voted to advance the amended version of HB 1267. The bill now goes to the State Government Committee in the House. In the Senate, SB 588 heads to the State and Local Government Committee, where it is on the agenda for April 13. This is the date of the final meetings of the two committees this session.

TELC is currently mired in a legal battle with one of its licensed sportsbooks, TN Action 24/7. TELC’s sports betting committee issued a suspension against the local operator in a random hearing before March Madness, but the bookmaker was able to get it lifted by win an injunction in class.

Amendment reverses script

The original bills required TELC’s Sports Betting Advisory Council to meet jointly with the lottery board to set rules and hold hearings, and they would have allowed the board and the board of directors to call special meetings rather than just the board, as is currently the law. But the new amendment goes further, as it appears to reverse the roles of advisory board and council. Previously, the council offered its support to the council, but according to the new amendment, it would be the council that would help the council.

The corporation must promulgate bylaws to implement this section, subject to council approval.
SECTION 3. Annotated Tennessee Code, Section 4-51-305 (a), is amended by deleting the paragraph and replacing the following instead:

(a) A Sports Betting Advisory Council is hereby established to apply this Part and oversee compliance with laws relating to the regulation and control of betting on sporting events in this State. The Board, its employees and its staff shall assist the Board in carrying out its functions under this paragraph (a) at the discretion of the Board.

The Sports Betting Advisory Council is an appointed nine-member group made up of law enforcement officials, lawyers and business leaders in Tennessee. Council members were appointed by the governor, lieutenant governor and leadership of the House and Senate in 2019. The idea of ​​giving more power to the council is not new – a a similar bill has been considered during the legislative session of 2020 but did not reach the finish line.

Bills are expected to leave committee next week and end up on the floors of the House and Senate for a chance to get through this session. The Tennessee General Assembly is scheduled to adjourn April 30.

Blocked responsible gambling invoices

SB 1029 and HB 884 are the bills that responsible gaming experts watch carefully. The bills would prohibit consumers from funding and withdrawing from a 24/7 Action sports game account and opening a so-called “flexible loan” in the same place, which is a practice that can now occur. The concern with the legislation is that the borrowed money could be used for gambling.

Previously, the bookmaker’s “partner” Advance Financial, a lender of high-interest loans of up to 279.5% per annum, distributed flyers advertising the bookmaker, a practice she says she has now stopped.

Bills have been on the committee agenda for several weeks with no action yet. The sponsor of the House bill, Representative Darren Jernigan, said Tuesday that he would withdraw the bill, stating that “there will be an amendment in the Senate bill.” They will continue to run it. If it goes over there, I can talk about it next year.

Tennessee Action 24/7, which is currently in a legal battle with the Tennessee educational lottery on illegal financial transactions occurring on its platform, had its license temporarily suspended last month. Sources say the company has hired several lobbyists to fight the bill, which is problem gambling advocate Brianne Doura-Schawhol of Epic Risk Management. testified in favor during a Senate hearing last month.

“Any suggestion that gambling is a way to pay off a loan, make money or solve financial problems is predatory,” she said at the time. “It is never advisable to gamble with borrowed money. This act of gambling with loaned funds is not only a red flag by experts, but remains one of the nine criteria listed for gambling addiction in DSM V. ”

While another Senate amendment the bill was introduced, lawmakers refused to act on it. The amendment would require companies like Action 24/7 and Advance Financial to maintain customer databases, which would then have to be crossed when a customer wants to open a new account, whether for sports betting or a loan. Under the proposed amendment, the penalty for offering both to a client is suspension, license revocation and a fine of up to $ 25,000.

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Legal-Bay announces decision in wrongful dismissal case https://turismo-stp.org/legal-bay-announces-decision-in-wrongful-dismissal-case/ https://turismo-stp.org/legal-bay-announces-decision-in-wrongful-dismissal-case/#respond Wed, 07 Apr 2021 23:13:56 +0000 https://turismo-stp.org/legal-bay-announces-decision-in-wrongful-dismissal-case/ PATERSON, NJ, April 1, 2021 / PRNewswire / – Legal-Bay, LLC, a leading pre-settlement finance company, today reports that it is increasing its funding for victims of wrongful termination in light of a recent decision. An affirmative action worker was injured when she tripped over a rod in the lobby. Paterson Town hall. The city […]]]>

PATERSON, NJ, April 1, 2021 / PRNewswire / – Legal-Bay, LLC, a leading pre-settlement finance company, today reports that it is increasing its funding for victims of wrongful termination in light of a recent decision. An affirmative action worker was injured when she tripped over a rod in the lobby. Paterson Town hall. The city worker used workers’ compensation to take a year off to recoup, but there was a communication problem when she asked for an extension and was fired. After a long legal battle, Ms Kinion was rewarded $ 125,000.

Legal-Bay expects to see comparable damages for similar cases in the future. They urge complainants who have lost their jobs due to racial, gender, disability or age discrimination to apply for financial assistance now while awaiting a decision on their case. A lawsuit loan can help ease the burden on those struggling with lost wages, lost benefits, emotional stress, punitive damages, and legal fees.

Chris Janish, CEO, commented on the company’s goal of assisting plaintiffs in similar situations: “Due to the complexity of American businesses in regards to what is deemed morally just and legally just, we are seeing a dramatic increase in wrongful dismissal lawsuits. These cases have substantial value. for plaintiffs who have done nothing wrong but have been unjustly dismissed. ”

If you are a lawyer or plaintiff in a wrongful termination lawsuit and need an immediate cash advance settlement loan for your case, please visit our website. HERE or call 877.571.0405.

Legal-Bay’s settlement loan program can provide immediate liquidity before an applicant’s early monetary award. Non-recourse court loans – sometimes referred to as lawsuit loans or settlement loans – are risk-free because the money does not need to be repaid if the recipient loses their case. Therefore, court loans are not really a loan, but rather a cash advance.

If you need an immediate cash advance loan settlement following your wrongful termination lawsuit, please visit the company’s website. HERE or call 877.571.0405 where qualified agents are ready to hear about your specific case

SOURCE Legal-Bay, LLC

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Indiabulls and Edelweiss Seek To Launch AIFs To Advance Home Lending https://turismo-stp.org/indiabulls-and-edelweiss-seek-to-launch-aifs-to-advance-home-lending/ https://turismo-stp.org/indiabulls-and-edelweiss-seek-to-launch-aifs-to-advance-home-lending/#respond Wed, 07 Apr 2021 23:13:56 +0000 https://turismo-stp.org/indiabulls-and-edelweiss-seek-to-launch-aifs-to-advance-home-lending/ Edelweiss is also moving in the same direction after selling development loans to investors. The subjectsIndiabulls | Edelweiss | AIF Financial services groups, such as Indiabulls and Edelweiss, are looking to launch alternative investment funds (AIFs) to provide loans to real estate developers. It comes after selling developer loans to investors to reduce the risk […]]]>

Edelweiss is also moving in the same direction after selling development loans to investors.

The subjects
Indiabulls | Edelweiss | AIF

Financial services groups, such as Indiabulls and Edelweiss, are looking to launch alternative investment funds (AIFs) to provide loans to real estate developers. It comes after selling developer loans to investors to reduce the risk of their books and generate funds after the liquidity crunch in the non-bank financial sector (NBFC) following IL & FS defaults.

AIFs are mutual funds that invest in private equity, real estate, etc. They are a better way to manage wholesale real estate financing, given that it is difficult to keep an eye on ALM (asset-liability management) and …

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Fed group charts path for securitized issuers to drop Libor https://turismo-stp.org/fed-group-charts-path-for-securitized-issuers-to-drop-libor/ https://turismo-stp.org/fed-group-charts-path-for-securitized-issuers-to-drop-libor/#respond Wed, 07 Apr 2021 23:13:56 +0000 https://turismo-stp.org/fed-group-charts-path-for-securitized-issuers-to-drop-libor/ The Federal Reserve-backed group that guides the implementation of the guaranteed overnight funding rate has given issuers of securitized debt a card that could accelerate the Libor transition. While other segments of the bond market have already made headway in removing the London Interbank Offered Rate as a benchmark against which it sells debt, structured […]]]>

The Federal Reserve-backed group that guides the implementation of the guaranteed overnight funding rate has given issuers of securitized debt a card that could accelerate the Libor transition.

While other segments of the bond market have already made headway in removing the London Interbank Offered Rate as a benchmark against which it sells debt, structured credit has lagged far behind. This week, the Alternative Reference Rates Committee (ARRC) gave the market a way to close the gap by issuing a white paper describing a specific approach for using the 30-day SOFR average.

Freddie Mac a used the SOFR alternative benchmark in multi-family apartment securitizations while JPMorgan Chase & Co. has used it for a handful of AAA tranches in its series of prime residential mortgage bonds starting in October, albeit large portions structured finance markets have remained loyal to Libor. ARRC recommendations can be used to calculate payments on asset-backed securities as well as residential and commercial mortgage-backed securities.

The ARRC suggested that the monthly interest rate would be reset before each interest accrual period rather than at the end of each period to better align with the resetting of consumer loans, residential mortgages. and underlying business. The paper does not address Libor transition issues for secured loan obligations.

Read more: Libor Kill Becomes Reality for Banks as Key Milestone Takes

The loans underlying the ABS and MBS “are reset in advance, regardless of the interest rate used, so that borrowers know in advance what they will owe on the corresponding payment date, thus allowing concerned borrowers to manage household budgets or monthly cash flows, ”the committee wrote. The group “recognized the importance of this calendar for borrowers. Resetting the “late” ABS would introduce basis risk when the underlying assets are reset in advance. “

While Libor’s retirement received a extension mid-2023The ARRC insisted that the discontinuation of Libor products should begin as soon as possible.

“The ARRC has strongly insisted that the time has come for market participants to stop issuing new Libor-based products, including securitized products,” said Tom Wipf, President of the ARRC and vice president of institutional securities at Morgan Stanley, in a statement.

Open questions

Although the ARRC has work in progress to develop a forward-looking forward rate based on SOFR (known as SOFR), the authors said, “There is no guarantee when or if the ARRC will recommend the future. use of the term SOFR, whether for securitized products or otherwise. . It is also uncertain whether a recommendation would apply to all securitized products and could be limited to use in traditional securitized products only as part of a Libor transition. “

Read more: Libor transition continues even with uncertain SOFR forward rate

Therefore, it is important not to wait for these forward-looking rates to become available, the ARRC said. Therefore, the 30-day average SOFR could be used.

Freddie Mac has used the SOFR benchmark on some of his multi-family CMBS from December 2019. The joint stock company owned by Congress in 1970 to create a continuous flow of funds to mortgage lenders, issued 25 CMBS at rate variable containing SOFR bond classes with a total outstanding balance of over $ 23 billion through Jan. 31, according to ARRC data.

While the initial four transactions referred to a monthly SOFR average set in advance, all SOFR bond classes and the underlying SOFR loans thereafter incorporated the published 30-day average SOFR, also set at advance, the ARRC said.

“While this document presents an option for how ABS, MBS and CMBS products could use the 30-day average SOFR, market participants can select the appropriate adjustments to the methodologies,” ARRC said in the document.

Relative value: RMBS, CMBS

  • Canyon Partners has found relative value in some smaller, more esoteric securitizations, said George Jikovski, partner and portfolio manager of the company, in an interview this week.
  • Examples include credit risk transfer contracts with credit insurance and mortgage loan insurance (private label contracts, not Fannie / Freddie CRT transactions). In this sector, BBB-rated risk is emerging from around 250 basis points to 275 basis points above Libor, Jikovski said.
  • Canyon has also recently added Freddie-K C tranches from GSE’s multi-family CMBS series of operations, and has generally preferred floating rate securities to fixed rate securities.

To quote

“The strong online consumer lending performance that persisted through 2020 accelerated significantly in 2021,” according to a recent online lending analysis from dv01, a data company that tracks underlying loans to securitized debt. “Thanks to two rounds of fiscal stimulus, performance was significantly boosted by a second government stimulus early in the year and continued until March 2021. Depreciations continue to decline, modified borrowers are coming back full payments, prepayments and total. payment rates exceed previous highs. “

And after

ABS deals in the queue for next week include Ford (senior revolving auto loans), GM Financial (senior auto loans), Finch Investment Group (tax liens), Kubota Credit Corporation (equipment) and power purchase (payments to consumers).

–By Adam Tempkin

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Competition intensifies for cash advances to Manitoba farmers https://turismo-stp.org/competition-intensifies-for-cash-advances-to-manitoba-farmers/ https://turismo-stp.org/competition-intensifies-for-cash-advances-to-manitoba-farmers/#respond Wed, 07 Apr 2021 23:13:56 +0000 https://turismo-stp.org/competition-intensifies-for-cash-advances-to-manitoba-farmers/ Manitoba farmers have many options for low-interest, interest-free cash advances on their upcoming 2021 crops, including news from the Manitoba market, FarmCash, operated by the Alberta Wheat Commission (AWC). FarmCash joins the Manitoba Crop Alliance (MCA), the Canadian Canola Growers Association (CCGA) and the Manitoba Livestock Cash Advance Inc. – staunch administrators of the federal […]]]>

Manitoba farmers have many options for low-interest, interest-free cash advances on their upcoming 2021 crops, including news from the Manitoba market, FarmCash, operated by the Alberta Wheat Commission (AWC).

FarmCash joins the Manitoba Crop Alliance (MCA), the Canadian Canola Growers Association (CCGA) and the Manitoba Livestock Cash Advance Inc. – staunch administrators of the federal government’s Advance Payment Program (APP) in this province.

Despite FarmCash’s decision this year to expand beyond Alberta where it started in 2018, recent changes to the AAP, including the requirement to make financial statements public with fiscal 2020, could see fewer directors in the future.

The MCA through one of its founders, the Manitoba Corn Growers Association, has been issuing advances for 40 years.

The CCGA and its predecessor, the Prairie Canola Growers’ Council, have been doing this for 37 years.

Officials from both organizations say they are not concerned that FarmCash is trying to poach its customers.

Meanwhile, administrators report strong early demand for spring advances, in part because of the low interest rates.

As with last year’s cash advance program, farmers with enough seeded acres or, later, stored crops, can borrow up to $ 100,000 interest-free, plus an additional $ 900,000 at low interest rates.

Farmers can use the loans as they see fit, as long as they pay them back as they deliver their crops. This includes providing cash flow so that farmers can get better prices rather than having to sell to pay their bills when prices are poor.

Why is this important: Agriculture is a high-risk, capital-intensive, low-margin business. Access to low-interest loans secured against production gives farmers more flexibility, including timing of sales when prices are higher.

FarmCash, MCA and CCGA officials all said in separate interviews that their good service is what draws farmers to them.

“We continue to be an option for Manitoba farmers looking for a cash advance,” MCA CEO Pam de Rocquigny said in an interview on March 15.

“We have a very loyal clientele and I think they come to us thanks to our service.

“We are proud to be here for 40 years.”

Once the paperwork is complete, MCA’s goal is to issue a loan in three to five business days, she added.

The CCGA and FarmCash have the same goal.

As farmers prepare for another growing season, they have more options than ever for their cash advance needs.

Photo:
Deposit

The CCGA experienced delays a year ago due to COVID-19, but quickly caught up, Dave Gallant, the association’s director of finance and operations, said in an interview on March 16.

“We are ready to process the advances no matter if COVID lasts six months or six years,” he said.

While farmers applying through MCA can complete a PDF application online, or print it and then email, fax or file the completed form, CCGA and FarmCash applications can in some cases be done online.

“We’re definitely seeing huge adoption from our customers on the online side,” said Gallant. “And we have a lot of positive feedback from our customers about the changes and how easy they are.”

FarmCash not only issues cash advances, but offers advice to farmers on how to best use their loans if they wish, said Syeda Khurram, COO of FarmCash, in an interview on March 17.

“We pride ourselves on our easy online application process and high level of service and our ability to release loans in three to five business days to meet their (farmers’) needs in a timely, transparent and timely manner. effective, ”she said.

The CCGA and FarmCash offer very low interest rates – bank prime rate minus 0.75% – and do not charge an administration fee.

The MCA rate is the bank’s prime rate minus 0.25% and charges an administration fee of $ 250. De Rocquigny noted that it was competitive with banks and credit unions.

Although MCA has offered advances to farmers outside of Manitoba in the past, it now serves only that province. MCA is not concerned about FarmCash coming to Manitoba.

“There are obviously differences between the suppliers in the province and probably quite striking differences when it comes to the CCGA, ourselves, Alberta Wheat (Commission)…”

The CCGA is also not worried, Gallant said, noting that when the advance program started in 1957, the Canadian Wheat Board was the sole trustee, up from 32 now.

CCGA publishes advancements on a wide range of crops, livestock and honey.

“Our goal at the CCGA has always been to be that one-stop-shop for the average farm in Western Canada to meet all of their cash needs,” he said.

This is also the goal of FarmCash, which extends to Saskatchewan and British Columbia, as well as Alberta.

“During the pandemic, we saw a very high demand for FarmCash from producers outside of Alberta,” said Khurram. “They were facing delays in their cash advances and FarmCash is there to meet their short-term needs…

“We did a thorough analysis and as a result we saw the need and the demand for this service for them…”

But it’s not easy to gain market share where other treasury managers are well established, Gallant said.

“We haven’t seen a significant change in market share in Alberta,” he said. “Their business model is a little different, and it will be interesting to see how it works for farmers in Manitoba and Saskatchewan who want to take out an advance with an Alberta association.

“Basically, clients don’t move between admins. They stay relatively loyal to the admin they’ve been dealing with, so we don’t think there will be a big impact. “

One advantage is that FarmCash incentivizes new farmers to take advances, Gallant added.

“What you’ve seen over the past two years is that some of the smaller directors have given up,” he said.

And if the choices are good for farmers, the more associations there are offering cash advances, the more farmers pay for administration, Gallant said. Boards will have to decide whether the cost of administering the advances is worth it for the farmers they serve, he added.

The CCGA typically lends over $ 1.6 billion per year and is able to borrow at a low rate and fund its program on the small margin it earns between the cost of borrowing and the loan.

“The only farmers who pay for this are those who use the CCGA program,” Gallant said.

FarmCash has invested $ 400,000 in its program, Khurram said. Presumably, this is the revenue generated by the AWC levy. But the goal is to make FarmCash self-sufficient, she said.

Last year, AAFC “made it clear that the revenue generated by the program is to be directed towards the delivery of the AP and for the benefit of program participants,” the ministry said in an email on March 18. APP contingency fund to cover unforeseen costs of program execution. Once this fund is established, part of the income generated by the program can be used to support activities unrelated to the APP. “

Over the years, questions have been raised about the possibility of transforming the APP – a government program – into another source of income for associations.

Some farmers have criticized the CCGA for failing to report income, including income from issuing advances. As a private, not-for-profit company, it is not required to make its financial statements public.

But “starting in the 2020 program year, administrators are required to post their prepayment program financial statements on their web page,” AAFC said.

The new rules will likely see fewer directors in three to five years, Gallant said.

“Where there is duplication of service, it wouldn’t surprise me if small administrators choose not to continue because the new rules make it less attractive,” he said.

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